DBS issues US$577.3m capital debt in Australia

March 21st 2018 | Multiple countries | Banking | DBS Group

On March 8th DBS Group Holdings Ltd said that it had priced the issue of a A$750m (US$577.3m) capital debt offering in Australia. This will be the first time that the company has issued debt in Australia to meet its capital requirements as mandated by the Singaporean financial regulator. The notes are expected to be issued on March 16th and are due in 2028. Net proceeds will go towards funding inter-company loans and other forms of lending to DBS Bank Ltd and subsidiaries.

The new capital funding comes under the Singaporean company's US$30bn medium-term note programme. The notes are redeemable on or after March 16th 2023. The move follows DBS Bank's acquisition of certain wealth management and retail banking businesses of Australia and New Zealand Banking Group Ltd (ANZ) in February.

The new debt offering comes on the back of strong performance in 2017. DBS said that net profit rose by 4% to a record S$4.4bn (US$3.3bn). Total revenue increased by 4% to S$11.9bn owing to growth in fee income and loans. For 2018, the company reaffirmed that it expects loans to increase by 7-8%, boosted in part by strong Chinese outbound investments. It also expects "low double-digit" growth in revenue, enhanced by the ANZ deal.